Summary: Potential denial of E-rate discounts for FY 2005 (July 1, 2005
- June 30, 2006). Districts and ESDs purchasing off State Master
Contract will be required to file application for E-rate discounts
independently for FY 2006 (July 1, 2006 - June 30, 2007) This new
requirement applies to those districts and ESDs referenced in
attached file.

Due to a new interpretation of E-rate rules by the Schools and Library
Division (SLD), nearly $1 million of Oregon E-rate funds may be denied
for FY 2005. If your district was a consortium member with the
Department of Administrative Services (DAS), purchased off of the State
Master Contract, and had DAS apply for the discounts on your behalf as
part of a consortia your funds are at risk. Oregon is not the only
state to experience this surprise interpretation as the states of Utah,
Arkansas, and Illinois have already had millions of E-rate dollars
denied for FY 2005 for similar rule interpretations that were seemingly
not applied in past applications for funds.

As such, the Department of Administrative Services, Information
Resources Management Division ("DAS IRMD") informed the Oregon
Department of Education on Thursday December 22nd, 2005 that it will no
longer be submitting a statewide application for e-rate discounts on
frame relay telecommunications services purchased off the State Master
Contract.

In the past DAS IRMD submitted an application for e-rate discounts on
the frame relay circuits purchased by educational service districts,
school districts, schools and libraries throughout Oregon. This year,
such purchasers of these services will be encouraged to submit their own
applications. DAS IRMD and ODE personnel will be available to help
those districts that plan to file for e-rate discounts.

A list of educational service districts, school districts, schools and
libraries/library systems impacted by this decision is at the end of
this memo. If your entity is on this list and you plan to apply for the
e-rate discounts on your frame relay circuits, please be aware of two
critical dates.

Step 2: Not later than January 19, 2006, file the Form 470
application on behalf of your organization. If you are an Educational
Service District, you will need to obtain letters of agency the schools
districts listed in your e-rate application.

Step 3: Wait 28 days.

Step 4: After the 28-day waiting period but on or before February 16,
2006, file Form 471 e-rate application.

A video conference is scheduled for January 5th, 2006 @ 10:30 a.m. in
which complete instructions will be given to those districts seeking to
file for the e-rate discounts on their frame relay services. For
further instructions to sign up for the video conference, please contact
Barbara.Beckner@state.or.us no
later than noon January 4th, 2006.